The US has granted Iraq the maximum extension to a sanctions waiver allowing it to import gas from Iran for four months, an Iraqi official revealed on Wednesday.
The unnamed Iraqi official told AFP that the new exemption granted by the Biden administration allows Iraq to import electricity and gas from its eastern neighbour from early April until early August. The exemption period is the most prolonged period granted to Baghdad so far and the maximum period allowed under US law.
The new exemption comes ahead of the "strategic dialogue" meeting between Washington and Baghdad, slated for 7 April.
Baghdad depends heavily on Iran to secure gas and electricity to supply around one-third of its power requirements.
In late 2018, the US blacklisted Iran's energy industry, but granted Baghdad a series of temporary waivers, hoping Iraq would wean itself off of Iranian energy by partnering with US firms.
Iran has demanded nearly $6 billion in unpaid gas bills from the Iraqi Ministry of Electricity, which Baghdad had been unable to pay due to US sanctions.
However, Western and Iraqi sources reported that Washington had given the green light to Baghdad to release $2 billion owed to Iran in return for gas imports via a Swiss bank account.